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Shale litigation settlement possible soon

Conservation groups and the federal government hope a settlement could be just days away for two January 2009 lawsuits challenging decisions related to potential oil shale development.

Attorneys for both sides said in recent court filings they expect to file a final settlement agreement by Friday or proceed with active litigation in the cases.

Conservation groups filed the suits in the waning days of the Bush administration. The suits say the Bureau of Land Management failed to adequately assess environmental impacts in drafting regulations for a commercial oil shale program and amending land-management plans in Colorado, Utah and Wyoming. The amended plans potentially allow oil shale and tar sands development on more than 2 million acres.

The suits were inherited by the Obama administration and new Interior Secretary Ken Salazar, who as a U.S. senator from Colorado had criticized some of the oil shale policies of the Bush administration.

Shell, which holds three federal oil shale research and development leases in Rio Blanco County, intervened in both lawsuits, and the American Petroleum Institute is an intervenor in one of them.

The Obama administration has been granted numerous filing extensions in the cases, after citing reasons such as the fact that top Department of Interior officials were having to focus their attention last year on the Gulf oil spill. Last May, U.S. District Court Judge John. L. Kane expressed impatience over the continued requests for delays.

On Jan. 31, he agreed to extend the government’s deadline until Friday for filing its administrative record in one of the cases. But he warned in his order, “The parties should be aware, however, that I am not inclined to continue granting motions for extensions of deadlines in this case absent a compelling reason (which does not include vague assurances that the parties are engaged in ongoing settlement negotiations).”

The federal government indicated in an August filing the parties were making “significant strides” in negotiations.

The government says putting together the administrative records in the cases is complicated by their large size. In one of the cases, it exceeds 200,000 pages, and in the other, it includes 75,000 public comments submitted during a rule-making process.

The government estimated that assembling each record will cost more than $100,000 for a contractor to help do the work.